Quick ratio: Looking at Liquidity Without Inventory
The quick ratio focuses on cash, marketable securities and receivables relative to current liabilities. It narrows the current-ratio view by excluding inventory.
Use the Quick ratio Calculator to enter your own figures and compare the result with the worked example below.
Quick ratio formula
Quick ratio = (Cash + Marketable securities + Receivables) ÷ Current liabilities
Worked example
| Item | Example value |
|---|---|
| Cash | 10000 USD |
| Marketable securities | 20000 USD |
| Receivables | 30000 USD |
| Current liabilities | 50000 USD |
| Quick ratio | 1.2 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Receivables are not the same as cash in the bank. Assess collectibility and due dates before treating the entire numerator as immediately available.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.